Northwestern Mutual sponsored a poll seeking to learn the attitudes and motivations among Americans toward obtaining life insurance1 and planning for future financial security. The study surveyed more than 2,000 American adults aged 18 and older. (Conducted 2012)

Planning Awareness

Planning Awareness

The Life Insurance Awareness Poll asked respondents to weigh in on their sense of security and confidence level toward protecting themselves against financial risk.

The findings revealed:

People who purchased life insurance1 are most often prompted to buy life insurance as a result of marriage (32 percent), retirement planning (25 percent) or the birth of a child (22 percent).

Among all individuals, 30 percent say they get the greatest peace of mind ‘knowing that their family will be provided for in the event of unexpected death’ and also ‘knowing that all debts would be paid.

The poll also indicates that people are not always fully leveraging the financial security of life insurance. When asked about the expenses they would consider in determining the amount of life insurance needed, few people who do not have life insurance factored in education (15 percent) or childcare (11 percent) expenses, and a third of people weren’t certain what expenses they would need to cover at all.

Many consumers overlook the potential uses of life insurance. For example, 52 percent of people who purchased life insurance say they were motivated to purchase it in order to provide for loved ones, but only 6 percent were motivated to purchase a life insurance policy to fund an inheritance for heirs or charities/non-profit organizations.

Gender Motivations

The Life Insurance Awareness Poll looks at how and why men and women are using life insurance in the context of their long-term financial planning. The findings showed that men and women feel very differently about financial planning.

The research revealed:

While 70% of women who own life insurance report having it makes them feel secure (versus 61% of men), when asked about how they have made decisions about their life insurance coverage, the responses indicate that women may not be as secure as they could be.

Women who have life insurance are more likely than men to have been mainly motivated to purchase life insurance in order to pay final expenses (44% vs. 33%), yet nearly one in five (18%) women have not taken any of their expenses into account in determining how much insurance they need.

Women are less likely than men to have been prompted by marriage (29% versus 35%) or home ownership (16% versus 20%).

Women are significantly more likely than men to buy life insurance as a result of the death of someone who did not have life insurance (10% versus 6%).

Significantly more women who have life insurance than men were motivated by the desire to pay final expenses – 44% versus 33% respectively.

Significantly more men who have life insurance than women were motivated by the desire to provide for loved ones – 57% vs. 47% respectively.

Generational Motivations

The Life Insurance Awareness Poll also showed the motivations behind obtaining life insurance and planning future financial security are quite different by age and lifestyle.

The research revealed:

Younger Americans – those who are 18 – 34-years-old – who have life insurance are most likely to have purchased life insurance due to the birth of a child than those age 55+ (28% versus 16% respectively).

More than one-third (36%) of Americans 55+ years old who have life insurance were prompted to buy life insurance as a result of marriage and 31% were prompted as part of a retirement plan.

45 – 54-year-olds who have life insurance were prompted by marriage (39%), followed by retirement planning (25%) and homeownership (25%). This group had the highest percentage of any other age group when asked how secure they feel as a result of owning life insurance (69%).

When asked what provides Americans with the greatest peace of mind, the generations once again stood apart:

18 – 34-year-olds (35%) are significantly more likely than those ages 35-54 to have peace of mind as a result of knowing all their debts are paid.

Both 35 – 44-year-olds (34%) and 45 – 54-year-olds (36%) derive the greatest peace of mind knowing that their family will be provided for in the event of their unexpected death, and those aged 18-34 (68%) and 45-54 (58%) who have life insurance were significantly more likely to have been motivated to purchase life insurance in order to provide for their loved ones.

Those who are 55+ (31%) find the most peace of mind in knowing that they will have enough money to live in retirement.

18 – 34-year-olds (10%) who have life insurance were significantly more likely than those age 35-44 (2%) to have purchased life insurance in order to leave an inheritance to heirs or a charity/non-profit.

Among those who own life insurance, when considering expenses in order to determine the amount of life insurance needed:

18 - 34-year-olds (27%) were significantly more likely than those 45 and older to indicate that they would have factored in education expenses.

More than one-third of 35 – 44-year-olds (38%) considered income replacement.

45 - 54-year-olds were most likely to have factored in their mortgage (40%) compared to those 18-34 (21%) and 55+ (24%).

Northwestern Mutual is the marketing name for The Northwestern Mutual Life Insurance Company and its subsidiaries. Life and disability insurance, annuities, and life insurance with long-term care benefits are issued by The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM). Long-term care insurance is issued by Northwestern Long Term Care Insurance Company, Milwaukee, WI, (NLTC) a subsidiary of NM. Securities are offered through Northwestern Mutual Investment Services, LLC, (NMIS) a subsidiary of NM, broker-dealer, registered investment adviser, member FINRA and SIPC. Fiduciary and fee-based financial planning services are offered through Northwestern Mutual Wealth Management Company® (NMWMC), Milwaukee, WI, a subsidiary of NM and a federal savings bank. Products and services referenced are offered and sold only by appropriately appointed and licensed entities and financial advisors. Not all products and services are available in all states. Not all Northwestern Mutual representatives are advisors. Only those representatives with the titles "Financial Advisor" or "Wealth Management Advisor" are credentialed as NMWMC representatives to provide advisory services.